Decided on February 29,1996

Ape Belliss India Ltd. And Another Appellant
E.S.I. Corporation And Others Respondents


Nikhil Nath Bhattacharjee, J. - (1.)Petitioner No. 1 is a company and petitioner No. 2 is a director of the said company. They have challenged legality and validity of the demands made by letters dated 14th Jan., 1980 and 9th Dec., 1981 by the Employees State Insurance Corporation (E.S.I.) Authority as also the notice to show-cause dated 23rd Dec., 1981 issued by the said authority.
(2.)The petitioners' case as that they have their factory at Bhadreswar, District-Hoogly and their registered office is situated at 6 Russel Street, Calcutta. In the registered office the petitioners employ three categories of employees, viz. (1) employees connected with the administrative works of the factory including purchase of component parts and raw materials and sale of the products of the factory. All the employees of this category draw salary above the ceiling limit and do not come within the definition of employees as provided under the Act, (2) Employees connected with service rendered by the petitioners for products imported from abroad for the machineries manufactured by the company. The petitioner No. 1 is also an agent in respect of certain imported goods on its associated companies in the United Kingdom. The employees in this category do not also fall within the provision of Sec. 2(9) of the Act, (3) the employees connected with the business of resale of spare parts purchased from the market and stored in the godown attached to the registered office. Such spare parts are not manufactured by the petitioner No. 1 in the factory and accordingly such employees are not connected in any way with the administration of the factory and are not covered by Sec. 2(9) of the Act. A list of employees in various categories with their salaries mentioned against each is annexed as part of the petition marked 'C'.
(3.)This being the position, the petitioners allege that no contribution under the E.S.I. Act was due or payable by the petitioner No. 1 in regard to any of its employees working in the said registered office since by reason of the definition of the employees in Sec. 2(9) of the E.S.I. Act such employees in the head office were not covered by the said Act. But in spite of the same, by a letter dated 14th January, 1980, the respondent E.S.I. Corporation Authority made a demand for a sum of Rs. 50,100.00 on account of the said employees payable by the petitioner No. 1 for the period from July 1974 to Dec. 1975 and Jan. 1977 to Sept. 1979. The petitioner by letters dated 24th Nov., 1980 and dated 18th Feb., 1981 pointed out the facts and circumstances stated above emphasising that no contribution was payable in respect of the said employees as the E.S.I. Act was not applicable to such employees but despite the said correspondence the respondent E.S.I. Corporation Authority made further demand for the period from Oct. 1979 to Feb. 1981 and the notice dated 23rd Dec., 1981 was addressed to the petitioner No. 2 calling upon to show-cause why the petitioner No. 2 should not be prosecuted under Sec. 85 and 85-A read with Sec. 85-C of the said Act for non-payment of contributions. The petitioner No. 2 was also served the summons dated 31st March, 1982 issued on the complaint or at the instance of the respondents asking him to appear before the 12th Court of Metropolitan Magistrate. The summons was issued on the complaint filed by the respondent No. 1 that the petitioner No. 2 had failed and neglected to submit contribution cards and for such failure petitioner No. 2 was liable to he prosecuted under the said Act. Maintaining that the demand notice and the complaint being wrongful, illegal without jurisdiction and not binding on the petitioner this instant application under Art. 226 of the Constitution has been filed for issue of mandamus commanding the respondents to withdraw, recall, rescind and cancel the said demands and notices and the complaint as also for forbearing and refraining from giving any effect or further effect to the said demands, notices and the complaint.

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